1. The Service encounter
Chapter 4

2. Learning Objectives
Use service encounter triad to describe a service firm’s delivery process.
Describe roles of technology in service encounter.
Differentiate organizational control systems for employee empowerment.
Classify customers into four groups based on their attitudes and expectations.
Prepare abstract questions and write situational vignettes to screen recruits.
Describe how creation of an ethical climate leads to job satisfaction and service quality.
Discuss role scripts in customer coproduction.
Describe how elements of the service profit chain lead to revenue growth and profitability.
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3. The Service Encounter Triad
Organization
Customer
Contact
Personnel
Efficiency
Versus
Satisfaction
Autonomy
Service Delivery
- Culture
- Empowerment
- Control Systems
- Supporting Technology
- Performance Evaluation
- Selection
- Training
- Ethical Climate
- Expectations
- Attitudes
- Coproduction
- Perceived Control
- Role of Scripts
- Outcome
- Failure Recovery
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4. Role of Technology in the Service Encounter
Technology
Technology
Technology
Customer
Server
Customer
Server
Customer
Server
A. Technology-Free
Service Encounter
B. Technology-Assisted
Service Encounter
C. Technology-Facilitated
Service Encounter
Technology
Technology
Customer
Server
Customer
Server
D. Technology-Mediated
Service Encounter
E. Technology-Generated
Service Encounter
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5. Evolution of Self-Service
Service Industry
Human Contact
Machine Assisted
Internet Facilitated
Banking
Teller
ATM
Online banking
Grocery
Checkout clerk
Self-checkout station
Online order/ pickup
Airlines
Ticket agent
Check-in kiosk
Print boarding pass
Restaurants
Wait person
Vending machine
Online order/ delivery
Movie theater
Ticket sale
Kiosk ticketing
Pay-for-view
Book store
Information clerk
Stock-availability terminal
Online shopping
Education
Teacher
Computer tutorial
Distance learning
Gambling
Poker dealer
Computer poker
Online poker
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6. The Service Organization
Culture ServiceMaster (Service to the Master) Disney (Choice of language)
Empowerment Invest in people Use IT to enable personnel Recruitment and training critical Pay for performance
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7. Definitions of Culture
Schwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organization’s members.
Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others.
Hoy and Miskel (1991) - Culture is shared orientations that hold the unit together and give a distinctive identity.
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8. Organizational Control
System
Objective
Employee
Challenge
Management
Key Issues
Belief
Contribute
Uncertainty about purpose
Communicate core values and mission
Identify core values
Boundary
Compliance
Pressure or temptation
Specify and enforce rules
Risks to be avoided
Diagnostic
Achieve
Lack of focus
Build and support clear targets
Critical performance variables
Interactive
Create
Lack of opportunity or fear of risk taking
Open organizational dialogue to encourage learning
Strategic Uncertainties
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9. Contact Personnel
Selection 1. Abstract Questioning 2. Situational Vignette 3. Role Playing
Training Unrealistic customer expectations Unexpected service failure
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10. Challenges Facing Customer Contact Personnel
Problem Customers Service failure 1. Unreasonable demands 1. Unavailable service 2. Abusive or hostile attitude 2. Slow performance 3. Inappropriate behavior 3. Unacceptable service 4. Unanticipated demands 5. Demands contrary to policies Use scripts to train for proper response
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11. Examples of Unethical Behaviors
Misrepresenting the Nature of the Service
Customer Manipulation
General Honesty and Integrity
• Promising a nonsmoking room when none is available
• Using bait-and-switch tactics
• Creating a false need for service
• Misrepresenting the credentials of the service provider
• Exaggerating the benefits of a specific service offering
• Giving away a guaranteed reservation
• Performing unnecessary services
• Padding a bill with hidden charges
• Hiding damage to customer possessions
• Making it difficult to invoke a service guarantee
• Treating customers unfairly or rudely
• Being unresponsive to customer requests
• Failing to follow stated company policies
• Stealing customer credit card information
• Sharing customer information with third parties
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12. The Customer
Expectations and Attitudes Economizing customer Ethical customer Personalizing customer Convenience customer
Role of Scripts in Coproduction
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13. Service Encounter Success Factors
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14. Employee Perceptions of Customer Service at a Branch Bank
Outstanding
Terrible
Terrible
Outstanding
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15. Higher Customer Satisfaction Higher Employee Satisfaction
Satisfaction Dualism   
Higher Customer Satisfaction
Higher Employee Satisfaction
More repeat purchases ↔
More familiarity with customer needs and ways of meeting them
Stronger tendency to complain about service errors
Greater opportunity for recovery from errors
Lower costs
Higher productivity
Better results
Improved quality of service
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16. Service Profit Chain
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17. Topics for Discussion
How does the historical image of service as servitude affect today’s customer expectations and service employee behavior?
What are the organizational and marketing implications of considering a customer as a “partial employee”?
Comment on the different dynamics of one-on-one service and group service.
How does use of a “service script” relate to service quality?
If the roles played by customers are determined by cultural norms, how can services be exported?
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18. Amy’s Ice Cream
Describe the service organization culture at Amy’s Ice Cream.
What are the personality attributes of the employees who are sought by Amy’s Ice Cream?
Design a personnel selection procedure for Amy’s Ice Cream using abstract questioning, a situational vignette, and/or role playing.
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19. Amy’s Ice Cream Facility
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20. AMY’S ICE CREAM Abstract Questions
What was your most rewarding past experience and why?
What are you looking for in your next job?
What have you done in the past to irritate a customer?
What flavor of ice cream best describes your personality?
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21. AMY’S ICE CREAM Situational Vignette
A particular customer has the irritating habit of always showing up about two minutes before closing and staying late. Often this occurs on the night when weekly store meeting are held after closing time. This delays starting the meeting and furthermore employees are on the clock waiting for the customer to leave. What would you do?
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22. AMY’S ICE CREAM Situational Vignette
As a new employee at a busy store, you have been performing routine clean-up tasks (garbage removal and restroom cleaning). Company policy dictates that these are tasks to be shared. It has become clear that two employees consistently avoid these jobs in favor of more pleasant duties. How would you handle this situation?
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23. Succeeding in a Mature Market
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24. Discussion Questions
How has Enterprise Rent-A-Car (ERAC) defined its service differently than the typical national car rental company?
What features of this business concept allow ERAC to compete effectively with the existing national rental car companies?
Use the service profit chain to explain the success of ERAC.
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25. Enterprise Service Concept
Target Market
Customer Value -convenience -rates -selection
Corporate Culture -hiring -rewards
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26. Enterprise Success Factors
Virtual Car
Relationship with repair shops
Upgrade by replacement car customer
On site dealer locations
Fleet management
Age of rental car fleet
Motivated employees
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27. Service Profit Chain
How Does Enterprise Rent-A- Car Illustrate the Service Profit Chain?
Operating strategy and service delivery system (employees)
Service concept (service value)
Target market (customers)
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28. Interactive Exercise
The class breaks into small groups and each group comes up with an example from each of the four organizational control systems (i.e., belief, boundary, diagnostic, and interactive)
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